The Supreme Court issued an opinion on Tuesday in Marietta Memorial Hospital Employees Health Benefit Plan v. DaVita Inc.who canceled the sixth circuit of October 2020 decision finding that DaVita Inc. plausibly asserted a claim against an Ohio hospital’s health plan for unlawfully discriminating against patients with end-stage renal disease by offering low reimbursement rates for the ambulatory kidney dialysis. Specifically, the majority of the Sixth Circuit found that the health plan violated the Medicare Secondary Payer Act Anti-Discrimination Provision— which prohibits a health insurance plan from differentiating its benefits based on whether or not a person has end-stage kidney disease — by offering lower reimbursement rates for services provided by dialysis providers. See DaVita, Inc. v. Marietta Mem’l Hosp. Use. Health Ben. Plan, 978 F.3d 326 (6th Cir. 2020). The Sixth Circuit, despite Judge Murphy’s dissent, found that the anti-discrimination provision allowed “disparate impact” liability and that limited payments for dialysis treatment had a disparate impact on people with end-stage kidney disease. . See id. at 349.
In a succinct seven-page opinion written by Justice Kavanaugh on behalf of a 7-2 majority, the Supreme Court overruled. Judge Kavanaugh, borrowing the language of Judge Murphy’s dissent, dismissed the Sixth Circuit majority’s “disparate impact” theory because the text of the statute’s anti-discrimination provision “does not raise questions on the effects of undifferentiated regime conditions that treat all individuals alike.’” Op. at 5 (citing 978 F. 3d at 363 (opinion of Murphy, J.)). And the text of the plan, according to the opinion, did not make “a difference in the benefits provided to people with and without end-stage renal disease”, because it provided the same benefits, “including the same outpatient dialysis benefits, to people end-stage renal disease”. and without end-stage renal failure. ID. at 4. In addition to being “atextual”, the Court also concluded that a disparate theory of impact “would be virtually impossible to implement fairly”. ID. at 5. According to the opinion, “the courts would be entirely at sea trying to determine an appropriate benchmark or comparator for ambulatory dialysis.” ID. at 6.
Judge Kagan, joined by Judge Sotomayor, dissented. The dissent agreed with Justice Kavanaugh’s opinion on the disparate impact, but instead would have found ambulatory dialysis to be a “proxy” for end-stage renal disease, as nearly all patients with end-stage renal disease , and hardly anyone else, undergo outpatient consultations. dialysis. Dissent at 1–2. The majority opinion, according to the dissent, “runs counter to both common sense and the text of the statute.” ID. at 2 o’clock.
The reception of the opinion is naturally divided, with Law360 reporting that the health plan’s attorney is “very pleased that the Supreme Court is reading the Medicare Secondary Payment Act as written”, and DaVita’s CEO criticizing “the narrow interpretation of the ‘Medicare Second Payer Act’ by the Court and limiting Act’s ability “to protect some of the most vulnerable patients in the healthcare system.”